HealthSouth to sell surgery division for $945 million

HealthSouth said this morning it is selling its surgery division to buyout firm Texas Pacific Group for $945 million.

The division has 139 outpatient surgery centers and three surgical hospitals in 35 states. HealthSouth said the new company is expected to be based in Birmingham and headed by executives who will leave HealthSouth. The deal is expected to be completed in late summer or early fall.

HealthSouth, which is recovering from a massive accounting scandal, has been selling parts of its operations to concentrate on its core inpatient rehabilitation business. It will use the proceeds to pay down debt.

"Today's announcement marks a major milestone in the strategic repositioning of HealthSouth," said CEO Jay Grinney.

Mike Snow, currently HealthSouth's chief operating officer, and Joe Clark, president of the surgery division, will leave HealthSouth to join the new company.

Texas Pacific, also called TPG, is one the nation's largest buyout firms, raising $16 billion for transactions last year alone. It has invested in companies such as Burger King, Continental Airlines and J.Crew, the retailer. Last year, the firm participated in a $1.3 billion buyout of Huntsville's Intergraph Corp., the software maker.

HealthSouth sold its outpatient rehabilitation business earlier this year to Pennsylvania-based Select Medical for $245 million.